Gawker Media has filed for Chapter 11 bankruptcy after a Florida judge issued a $140 million final judgment in favor of Hulk Hogan in the invasion-of-privacy lawsuit over the posting of a sex tape.
The online news organization founded in 2003 by Nick Denton which now includes other sites like Deadpin, Jezebel and Kotaku, reports that it has less than $100 million in assets and hundreds of millions in liabilities. Gawker is currently facing a wrath of litigation that's been connected to Silicon Valley billionaire Peter Thiel. Besides the Hogan suit, there are claims from a journalist and the alleged inventor of e-mail who both say they were defamed. Gawker is also facing off against the parent company of Daily Mail in court and was hit with a copyright lawsuit this week over a photograph of an Uber car.
Gawker has hired the investment bank Houlihan Lokey to advise it on a possible sale. Ziff Davis is said to be eyeing an opening bid of $100 million in an auction for the site, which had about 44 million unique visitors last month.
According to bankruptcy papers, Gawker has also secured a $7.66 million loan from Silicon Valley Bank with a line of credit of $5.3 million. Additionally, it's got a second credit agreement worth $15 million with US VC Partners. All told, that's $22 million in debtor financing as Gawker aims to restructure itself and fight off collection efforts from Hogan as its dispute with the former professional wrestler goes to an appeals court.
Hogan, of course, is listed as the biggest unsecured creditor in a disputed claim. The wrestler whose real name is Terry Bollea filed suit against Gawker after a post in Oct. 2012 about the wonders of watching celebrity sex. In March, a two-week trial was held that resulted in a victory for Hogan as well as Thiel, who provided secret financial backing after being the target of Gawker's former site, Valleywag, which outed him as gay.
Gawker also owes about $115,000 to the international law firm of Morrison Cohen and $82,000 to Risk Strategies Company.
Throughout its history, Gawker has been controversial from its genesis as a blog that had a feature called "Gawker Stalker" reporting on the movements of celebrities. Gawker has tangled with the likes of Quentin Tarantino for linking to a then-unpublished screenplay of Hateful 8 and Lena Dunham for revealing her book pitch. The network of Gawker sites has also broken ground over the years with reports including how Notre Dame football star Manti Te'o was hoaxed, how former Toronto mayor Rob Ford had a cocaine addition and how Facebook staffers were allegedly precluding conservative-tinged stories from trending.
This article was originally published by The Hollywood Reporter.